Earl Russell: It falls to me to complete the circle of every quarter of the Chamber. It is not for me to prescribe particular solutions on this subject, but we have heard tonight the kind of feelings to which any prudent government will listen. I am sure that the noble Earl is a prudent member of the Government and I am sure that he has listened.

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): I listened with great care to my noble friend and the other noble Lords who have contributed to this debate. I say immediately that I yield to nobody in my respect for my noble friend and her motives in tabling these amendments. I recognise that she is wholly sincere in her point of view, even though that point of view rests, as I shall hope to demonstrate, on some fundamental misapprehensions.

However, for her part I hope that my noble friend will recognise the Government's unshakeable commitment to service housing. Members of the Committee should be in no doubt that providing good homes for our service personnel and their families is and always has been our key objective. We also remain committed to stability, to the preservation of the married quarters patch and to making rapid advances towards improving the quality of quarters. Those are key tasks of government and our proposals for service housing, far from shying away from them, instead reaffirm our commitment to them.

My noble friend's amendments refer to consultation and parliamentary approval, both on the face of it unexceptionable principles. But it is clear to me and no doubt to the Committee that what we are considering here are in practice wrecking amendments, amendments which, if adopted at this late stage of the sale of the married quarters estate, would effectively derail the whole process.

Lord Williams of Elvel: I am sorry to interrupt the noble Earl at this early stage of his speech. I am sure he has a very elegant speech written by people I know not. This is not a wrecking amendment. This is not an early stage. It might be a late stage in the Government, but there is plenty of time. We do not have to go through all this palaver to get £1.5 billion just before a General Election so that the Government can give it away to the electorate. That is not the problem. The problem is to find some reasonable solution to the married quarters estate. It is not a wrecking amendment at all. If I may speak for the Government in waiting, we are perfectly happy to accept it.

Earl Howe: I am sure the noble Lord is extremely generous in that regard, but I beg to differ. There is no doubt in my mind that if the Committee felt constrained to accept this amendment it would severely damage, if

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not derail completely, the plans which the Government have laid out quite openly over the past eight to nine months. We are at a late stage. However, I hope that my remarks will assuage the noble Lord's concerns a little.

The choice before us is a clear one: either to reject the amendments and so complete the final leg of a journey which began with our 1992 manifesto commitment to improve the quality and management of service housing; or to adopt the amendments and effectively turn back to the ways of the past. It gives me no pleasure to remind the Committee--though I shall do so--what that past amounted to. The tale of the MoD's mismanagement of housing stock has been an extremely sorry one.

Lord Williams of Elvel: I cannot accept the noble Earl coming before this Committee and reciting a history of mismanagement by his own department. I find that absurd.

Earl Howe: That remark from the noble Lord clearly shows that he has absolutely no understanding whatever of the background to the Government's proposals. If he is not prepared to acknowledge that there is a severe empty homes problem at the MoD, then he has not begun to address these issues.

Lord Williams of Elvel: Perhaps the noble Earl--

Earl Howe: I am sorry. The noble Lord has interrupted me twice and I am not prepared to give way a third time unless he wishes to raise a particularly substantive point.

Even today, after all the efforts of recent years, one married quarter in five stands empty. We shall always need some spare capacity, but for the MoD to own and pay for maintaining and securing over 12,000 empty married quarters in England and Wales alone is financially and morally unacceptable. While mismanaging our stock in that way, we have not even succeeded in providing a decent housing service for our Armed Forces.

Inadequate and ill-planned investment has left far too many of our service families living in run-down quarters, as my noble friend acknowledged--in the worst cases in conditions approaching squalor. That is the extreme. It is not the generality but there are places of which we are ashamed. It is not wholly surprising that that should be so. The priority of the Ministry and of our Armed Forces over decades has been defence. In any competition for resources, whether finance or management attention, a function such as housing would always lose out to the demands of activities and programmes more central to our primary role. It is simply no good to argue, as my noble friend and others seem to be doing, that the right solution for service housing is to do as we have done in the past but to do it better. We tried that and it did not work. We need fundamental change. That is what the sale of the married quarters estate will achieve.

As we move to the final stages of the sale process, two great prizes are now within our grasp. First, the sale will finally resolve our long-standing ability to dispose of the thousands of service quarters we no longer need.

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The means will be to hand. The MoD will be able to relinquish unwanted properties simply by cancelling a lease at six months' notice. No longer will we be required to play the estate agent. The incentive will be there too as old habits of hoarding properties for which we have no real requirement are subjected to the discipline of paying rent.

Secondly, we will at last have the resources to carry through the urgent programme of upgrading poor quality housing which has rightly been a long-held service aspiration. We will set aside £100 million from the sale proceeds for a massive investment programme which will enable us to get the bulk of our quarters throughout the United Kingdom up to grade one condition in five to seven years. We shall be free of the burden of attempting to deal with quarters that we no longer want and shall be able to be sure that the houses we do need are brought up to the standard that our service families deserve.

Why the opposition? I am the first to appreciate that a degree of uncertainty in this sensitive area was to be expected. But legitimate concerns seem to have been overlaid with some fundamental misapprehensions. My ministerial colleagues and I have dealt with these so extensively in so many different fora over recent weeks and months that one begins to feel that certain of our interlocutors are simply determined not to hear. But I shall try again briefly to lay out the facts, the first and foremost of which is that, setting aside the upgrading of the housing stock, the sale should make little or no discernible difference to the occupants of the estate. I shall look at some of the specific concerns that have been raised.

The sale will have no impact on service personnel's entitlement to quarters. The MoD is, and will remain, committed to providing housing for those personnel who wish to exercise their entitlement. Our policy remains, as I emphasised in this Chamber last week, to provide the right houses in the right location at the right time. That policy is quite unaffected by the sale. I think it is worth reminding my noble friend that that policy is in no way limited by or to the quarters that comprise the existing estate.

What about interference by the new purchaser? There is no question of individual occupants having to have any dealings with the new purchaser of the estate. For maintenance and general customer service, they will continue to look, as in the past, to the MoD and there will be no implications whatever for security.

Noble Lords have referred to the patch. There is no threat to patch life. We fully understand the importance of preserving cohesive service housing communities, with all that they imply for solidarity and mutual support. But we have catered for that by ensuring that under the sale arrangements we will retain substantial control of which quarters we choose to retain and which to relinquish. The limited opportunities--and they are limited--available to the new landlord to secure vacant possession of individual housing sites are for this reason confined to whole sites. He has no scope for introducing undesirable neighbours or cherry-picking the best houses. Nor will he be able to use these limited

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opportunities to cream off the best housing. The reason he will not is that detailed, legally enforceable criteria will ensure that any site exchange will go ahead only if the exchange site offered is as good as or better than the original. The ministerial veto on operational grounds will protect us from losing key sites to redevelopment.

Why then should we object to consultation? First, because the analogy implied with local authority housing and large-scale voluntary transfers of local authority housing to a housing association is, I suggest to my noble friend, entirely misplaced. LSVTs have real implications for tenants in terms of their rights and legal position and of their rents and the maintenance service that they receive. But, as I have explained, none of that applies in the case of the occupants of our married quarters under the proposed sale.

However, there is another reason on which I invite my noble friend to reflect. We have already consulted and communicated extensively. My right honourable friend the Secretary of State for Defence wrote to the occupants of all married quarters in England and Wales to explain the position last autumn when the sale was originally announced. A parallel communication went to all personnel worldwide, as have subsequent updating messages. And, of course, the relevant service staffs up to and including the chiefs of staff have been fully involved in the development of our proposals since their inception. Indeed, they have had a major part in shaping them. Hence the chiefs' agreement that the proposals satisfy the interests of the services, a fundamental pre-condition, as we have made clear all along, for completing the transaction.

What then would be the effects of the proposed amendments? As I began by saying, and I repeat, they would simply derail this long sought opportunity finally to get our service housing right. We are in the closing stages of the sale process. It is essential to maintain a tight time-scale if the process is to be managed in a way which ensures the best possible outcome for both the services and the taxpayer. It suggests that the consultation down the chain of command which we have had was an inadequate way of safeguarding the individual serviceman's interests, with profound implications for the future management of our Armed Forces.

Finally and perversely--and this is a point which my noble friend herself adverted to--it would hamstring all our future surplus property disposals, sale or no sale, by introducing further delay and uncertainty into the process. Far from getting the 20 per cent. vacancy rate down, we would be looking at additional thousands of properties standing empty. I doubt very much whether that is really what my noble friend wants to see.

Perhaps I may deal with another misrepresentation that all this is about short-term financial opportunism and getting receipts into government coffers. When one considers the history of this proposal and the four years' hard work which has led up to the point we have reached today, that accusation is self-evidently absurd. Equally absurd is the idea that a one-off capital receipt can be used to finance tax cuts. They can only be founded on long-term affordability, as the Committee will only too

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readily appreciate. We are doing what we are doing because it is the right answer for the Ministry of Defence, the services and the occupants of married quarters. It would be tragic if this opportunity were to be sabotaged at the point when a successful outcome is at last within reach. I hope that my noble friend will reflect on that and on the assurances that I have repeated tonight.

As I said, I have listened carefully to my noble friend, as I hope I always do. I undertake to her now that if she withdraws her amendments I shall give very careful consideration to the points she has made between now and Report stage. There was much in her speech that was necessarily condensed. I shall also be happy to meet my noble friend privately to talk through all the issues in more detail. I hope that she will feel able to respond to that suggestion, which I make in a constructive spirit, so as to ensure that we really do achieve the right result for the services, service families and the nation's housing.